Vladimir Putin's introductory speech:

Good afternoon,

The main task of our meeting is to specify the parameters of the federal budget and the budgets of government off-budget funds for this year, both in general and in specific expenses.

Allow me to remind you that at the end of the past year we adopted a budget that was based on the former, pre-crisis macroeconomic forecasts. Its draft was submitted to the State Duma before the global crisis hit the Russian economy, and before prices of oil and other traditional export commodities dropped considerably.

When the crisis became reality, we made a decision not to suspend our work on the budget and submitted it to the Duma without major adjustments.

This was done, first, to start the new year with the approved law on the budget. Without this the country cannot live a normal life. Second, we needed time to understand the trends in the development of the global crisis and its depth, and to make a forecast of national socio-economic development. We also had to review budget commitments, find additional reserves and opportunities for streamlining budget expenditures, and also to decide where the funding should be increased to make anti-crisis measures more effective.

The Government has conducted such work almost every day during the last two or three months. The Ministry of Economic Development and the Ministry of Finance made necessary calculations. It has already been announced that the average annual price of oil is $41 per barrel rather than $95, as was planned before. For the time being, the current market situation corresponds to this forecast.

What does this mean? This means that we will have smaller revenues. The oil and gas sector has provided big contributions to the budget and now they will be more than halved. We will have less profit and face more tasks because of the crisis. At the same time, we will not renounce the implementation of major social and investment programmes.

I believe that their renunciation would only aggravate the economic decline instead of helping overcome it. Moreover, the budget provides for new expenses on anti-crisis measures.

What does this mean? This means that our revenues will be smaller than our expenses. In other words, we'll have budget deficit. We will have to finance budget deficit by borrowing at home and from the Reserve Fund. The fund has 4.8 trillion roubles. This is enough to balance out the budget in this and subsequent years.

However, in adjusting the budget, we should not forget about another important task - we should sustain macro-economic stability and keep the national currency in good standing.

This is why the budget deficit should not exceed the level that experts from the Ministry of Finance and the Central Bank consider safe for our economy.

We understand that otherwise inflation will reduce all our efforts to zero and deal an even heavier blow at the living standards of our citizens. This is why I'd like to repeat that we should streamline our expenses, or to be more precise, reduce them in some cases, or increase them in others in the context of the changing situation. However, I'd like to emphasise that after the suggested adjustment of the budget for 2009, these expenses, far from being reduced, will be tangibly increased as compared with the past year.

They will be even slightly bigger than those envisaged by the initial plan for expenses in 2009. As I've already said, the gist of our actions is to redistribute expenses while meeting all of the former social commitments, including a 30% rise in public sector wages and other similar measures. Today, we envisage additional expenses to support the economy. I mean the banking sector and industry, including the defence industry, transport, for instance, Russian Railways, small business, machine-building, agriculture and other sectors. Additional support should be given to the regions and to the Pension Fund.

Based on the results of this meeting, we will instruct the Ministry of Finance and the Ministry of Healthcare and Social Development to complete as soon as possible elaboration of drafts on introducing amendments to the federal budget and the budgets of government off-budget funds for 2009.

They should be discussed at one of the upcoming Government meetings and submitted to Parliament as soon as possible.

Now let's start the discussion.